Credit Card Originations Decreased, While Auto Loan Credit Delinquencies Topped Pre-Pandemic Levels
Consumer credit delinquencies rose to the highest levels in five years according to the January 2025 edition of CreditGauge from VantageScore, a leading national credit-scoring company. In January, the average VantageScore 4.0 credit score remained at 702. Average credit account balances rose by more than $1,000 compared to December 2024. This increase is the most significant month-over-month growth in nearly three years, bringing balances to a five-year high.
The combination of rising mid-to-late-stage credit delinquencies and rising credit balances suggests a growing debt burden that some consumers are increasingly struggling to manage,” said Susan Fahy, Executive Vice President and Chief Digital Officer at VantageScore. “This is both a short- and long-term trend. Later-stage delinquencies are key because they are an indication that late payments will likely not go away anytime soon.
Key insights for the January 2025 edition of CreditGauge include:
AUTO LOAN DELINQUENCIES ROSE: Higher borrowing costs and post-holiday spending likely drove the notable increase in Auto Loan delinquencies in January. Overall mid- and late-term delinquencies rose to the highest levels since January 2020, indicating growing financial strain among borrowers already behind on payments.
NEW CREDIT CARD ACCOUNT GROWTH DECLINED: Credit Card originations dropped 0.23% monthly in January 2025, driven by reduced post-holiday consumer demand. They also remained virtually flat (+0.04%) year over year. The sharp month-over-month decrease indicates that borrowers may be prioritizing managing their existing debt rather than taking on new revolving credit.
CREDIT BALANCES ROSE SHARPLY: In January 2025, overall credit balances increased to $105,700, up $1,049 (+1.0%) from December 2024, representing a four-year high. Mortgages largely drove the increase. Credit balances also ticked up by $1,350 (+1.3%) compared to January 2024. Elevated housing costs and high interest rates are making it more challenging for consumers to pay down mortgage debt.
CreditGauge is a monthly analysis highlighting the overall health of U.S. consumer credit. To download this month’s full CreditGauge report, visit the VantageScore website.
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